Actavis In Buy Range; Kors, Regeneron Set Up In Bases

Leading growth stocks continue to act well in the market. Many are holding gains nicely after powerful breakouts, and others are still within buying range. Some are setting up for potential moves higher. A market rally needs broad leadership, and there's plenty of it.

Actavis (ACT), formerly known as Watson Pharmaceuticals, cleared a flat base last week, rising 6% in strong trade. The generic drug maker is still within range, less than 1% past a buy point of 133.10. The company's second-quarter earnings report last week showed accelerating growth from the first quarter, with profit up 42% from a year ago to $2.01 a share. Sales rose 47% to $1.99 billion.

In May, Actavis agreed to acquire Irish drugmaker Warner-Chilcott (WCRX) for roughly $8.5 billion. The deal will greatly expand Actavis' women's health and urology business, but Actavis will reportedly have to divest some overlapping operations to secure approval from the Federal Trade Commission.

Regeneron Pharmaceuticals (REGN), meanwhile, is working on a cup-with-handle base. After a big run already, it's a late-stage base. After a 27% pullback, Regeneron has climbed to within 6% of its all-time high. Despite recent price strength, its Relative Strength line is lagging. Regeneron's flagship drug, Eylea, is used to treat age-related wet macular degeneration, a leading cause of blindness in the elderly.

And Michael Kors (KORS) has been consolidating gains since February. It tried to break out in late May to no avail and settled into another consolidation. The current consolidation could be looked at as a new cup-with-handle pattern with a potential buy point of 65.21, or simply a long handle area in a larger base with a potential entry of 66.28. Either way, it's consolidating gains constructively. Investors will get a look at fiscal Q1 numbers when the company reports Aug. 6 before the open. Profit is seen rising 44% to 49 cents a share, with sales up 38% to $570.8 million.

Leading growth stocks continue to act well in the market. Many are holding gains nicely after powerful breakouts, and others are still within buying range. Some are setting up for potential moves higher. A market rally needs broad leadership, and there's plenty of it.

Actavis (ACT), formerly known as Watson Pharmaceuticals, cleared a flat base last week, rising 6% in strong trade. The generic drug maker is still within range, less than 1% past a buy point of 133.10. The company's second-quarter earnings report last week showed accelerating growth from the first quarter, with profit up 42% from a year ago to $2.01 a share. Sales rose 47% to $1.99 billion.

In May, Actavis agreed to acquire Irish drugmaker Warner-Chilcott (WCRX) for roughly $8.5 billion. The deal will greatly expand Actavis' women's health and urology business, but Actavis will reportedly have to divest some overlapping operations to secure approval from the Federal Trade Commission.

Regeneron Pharmaceuticals (REGN), meanwhile, is working on a cup-with-handle base. After a big run already, it's a late-stage base. After a 27% pullback, Regeneron has climbed to within 6% of its all-time high. Despite recent price strength, its Relative Strength line is lagging. Regeneron's flagship drug, Eylea, is used to treat age-related wet macular degeneration, a leading cause of blindness in the elderly.

And Michael Kors (KORS) has been consolidating gains since February. It tried to break out in late May to no avail and settled into another consolidation. The current consolidation could be looked at as a new cup-with-handle pattern with a potential buy point of 65.21, or simply a long handle area in a larger base with a potential entry of 66.28. Either way, it's consolidating gains constructively. Investors will get a look at fiscal Q1 numbers when the company reports Aug. 6 before the open. Profit is seen rising 44% to 49 cents a share, with sales up 38% to $570.8 million.

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02/24/2015 05:22 PM ET

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